Grocery Corporation received $300,328 for $250,000, 11 percent bonds issued on January 1, 2012, at a market

Question:

Grocery received $300,328 for $250,000, 11 percent bonds issued on January 1, 2012, at a market interest rate of 8 percent. The bonds stated that interest would be paid each December 31 and that they mature on December 31, 2021.
Required:
1. Describe how the bond issuance affects the 2012 and income statement, specifically identifying the account names and direction of effects (ignore amounts). Also, describe its impact, if any, on the quick ratio and times interest earned ratio.
2. Without doing calculations, describe how the and income statement are affected by the recording of interest on December 31, 2012. Also, describe the impact, if any, of the December 31 interest payment on the quick ratio and times interest earned ratio.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
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